Deduction for interest on bonds: allowable when income is included in gross total income and bonds meet issuer and notification conditions.

Deduction applies to interest on bonds included in gross total income from ordinary sources where the bonds are issued by a local authority or a State Pooled Finance Entity and notified by the Central Government; the deductible amount is gross interest less expenses incurred in earning that interest, with such expenses determined by the method prescribed under clause (a) of sub-section (1) of section 17.

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